INDIA BUSINESS WORLD - AUGUST (16th - 31st) 2007
The Month that was ...
GENESIS COLOURS TO FORM LUXURY RETAIL JOINT VENTURE WITH SPORTS STATION INTERNATIONAL
GENESIS Colours, the marketer of Satya Paul brand, is forging a luxury retail joint venture with Sports Station International (SSIPL). The JV -Genesis Luxury - will roll out retail chain across India, exclusively dedicated to luxury brands. When contacted, Genesis Colour MD Sanjay Kapoor confirmed the development. He, however, declined to go into the specifics of the venture, including equity structure. "The contours of the JV are still being worked out and we can't comment on it," he said. "Genesis Colours will be driving the operation in the new company with SSIPL's promoter, Rishabh Soni, on the board." Genesis will be a majority stakeholder in the venture with an equity stake as high as 75%.
The two partners are exclusive Indian licensees for some of the world's biggest luxury brands, which will get transferred to the new company. While Genesis Colours holds licence for Canali in India, SSIPL is licensee for luxury labels such as Paul Smith, Aigner, Rosetti. "We are also in talks with a few other luxury brands for licences, which will be retailed through the new company," Mr. Kapoor added. Another luxury brand, Salvatore Ferragamo, which is being handled in India by SSIPL will, however, continue with it till such time negotiations with the Italian owner conclude. Elaborating on the reasons for inking the JV, Rishabh Soni, MD, SSIPL, said: "One needs to have a bigger portfolio to survive in the business of luxury retail. There are synergies in our individual strength which has brought us together."
The proposed venture will ride an investment of Rs 18-20 crore in the first year of operation that will go into setting up of standalone single luxury brand outlets and shopping-shops in key metros such as Delhi Mumbai, Bangalore and Hyderabad. Subsequently, the chain will enter other key cities. Over three years, the JV plans to have 50-70 outlets in all major Indian cities, with 6-10 exclusive retail stores for each of the JV's licensee brands.
Analysts say, while business of luxury brand retail has generated a great deal of hype of late, few people are operationally geared for the business. "We are looking at it seriously and that's the reason why we have decided to consolidate luxury retail business under one company banner for focused efforts," said Mr. Soni.
The last one year has seen a rising interest in global luxury labels in India. And not without reason. A report on 'India's Luxury Trends 2006' by retail consultancy, Technopak, pegs the upscale, premium and luxury market together at Rs 64,000-crore and high net worth individual households at 1.6 million, growing at around 14-15% per year. Though things have warmed up, industry observers say there is much work to be done.
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